Indonesia-South Korea Economic Cooperation Strengthens with Major Petrochemical Investment

Seoul, INTI – Economic cooperation between Indonesia and the Republic of Korea is experiencing a resurgence post-pandemic, with total bilateral trade reaching USD20.8 billion in 2023. As the 7th largest investor in Indonesia in 2023, South Korea's total Foreign Direct Investment (FDI) amounted to approximately USD2.5 billion, an increase of over USD200 million from the previous year.

One significant investment that has been realized is the construction of a petrochemical plant by Lotte Chemical. Established in 1976, the South Korean chemical company has grown to become the 7th largest in the world with a stable profit structure. The realization of PT Lotte Chemical Indonesia's investment lies in the downstream petrochemical plant project, known as the LOTTE Chemical Indonesia New Ethylene Project (LINE Project), involving a multi-trillion rupiah naphtha cracker located in Cilegon, Banten.

"This downstream petrochemical plant development by PT Lotte Chemical is a tangible manifestation of investment, and I express my sincere appreciation for this investment," said Coordinating Minister for Economic Affairs Airlangga Hartarto during a meeting with Lotte Chemical's Chairman on a working visit to South Korea on Monday (20/05).

During the meeting, Minister Airlangga praised the realization of investment and the construction of the downstream petrochemical plant complex by Lotte Chemical. This investment is expected to employ up to 15,000 people during the construction phase and 1,300 people during commercial operation. During President Joko Widodo's visit to the factory area in September 2023, the construction progress had reached 73%.

The construction project is targeted to be completed and operational by 2025. The plant will have a total production capacity of 3.1 million tons per year, with a production target of 1 million tons of ethylene, 520,000 tons of propylene, and 250,000 tons of polypropylene per year by 2025.

Currently, Indonesia still imports chemical products (ethylene, propylene, and polypropylene) significantly. The domestic industry's capacity for these products is currently only 7.1 million tons per year, necessitating efforts to increase production capacity to meet domestic needs.

Therefore, Minister Airlangga hopes that the PT Lotte Chemical Indonesia plant construction project can substitute imports, thus stimulating the local downstream petrochemical industry and supporting the creation of new jobs.

"With the investment in the construction of the PT Lotte Chemical plant, we hope it can stimulate the domestic petrochemical industry and create new job opportunities for the people," expressed Minister Airlangga.